Agricultural firm Sasini Tea and Coffee has issued a profit warning for the fiscal year ending September 2023, projecting net earnings to be 25% lower than in 2022.
The firm cites high production costs and a severe drought in the first six months of the fiscal year that impacted its bottom line.
“The major challenges during the year were occasioned by the very high cost of production due to unplanned escalation of input costs, the severe drought witnessed in the first six months of the financial year which affected production volumes negatively, lower than expected coffee prices and the effects of the severe recession in world commodity markets escalated by geopolitical events and factors that affected our macadamia business,” said Dr James Boyd McFle, the chairman ian advisory to shareholders.
Sasini reported a net profit of KSh1.17 billion in the fiscal year ended September 2022, more than doubling the KSh573.2 million reported in the previous comparable period.
Sasini’s tea is grown by a subsidiary, Kipkebe Limited, which operates two major CTC factories (Kipkebe and Keritor) serving four estates and outgrowers in Western Kenya, with a combined production capacity of over 10 million kilograms of tea annually.